Smart meters may not help slash energy bills

Published by Rebecca Rutt on 30 June 2011. Last updated on 30 June 2011

It's unclear if new smart meters will make any difference to reducing energy bills, says the National Audit Office (NAO).

The meters will be put into every home in Britain by 2020 and will show consumers how much gas and electricity is used in the house in an attempt to save money and reduce emissions.

Information will be instantly sent to your energy provider, putting an end to estimated bills and giving customers real time information on the energy they use.

This new initiative, from the Department of Energy will cost around £11.3 billion. The department suggests it could save households around £23 a year.

More research needed

However, the NAO has disputed the efficiency of the scheme.

It has called for more research to be done before the system is rolled out across the country and says there is "limited evidence" of how much and for how long consumer behaviour will change as a result.

It thinks savings will only be felt if energy companies pass these on to the customer – which at the moment is unclear.

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Amyas Morse, head of the NAO, says the benefits of proceeding with this major technological and logistical undertaking are still uncertain.

"Large-scale projects of this kind can take on a momentum of their own and so, along the way, there should be clear decision points at which the department will need to review costs to consumers, benefits and risks and judge whether to carry on as originally planned or significantly change direction," she says.

The rollout of the meters will take place in two phases. During the foundation stage, which began in March, the government started working with industry and consumer groups to ensure all the necessary groundwork was done for the second stage, the mass rollout which will start in early 2014 and is expected to be finished by 2019.

At the launch of the smart meter scheme, energy minister Charles Hendry, said: "[They] will enable us to modernise the electricity system over the coming years and create the smart grids we will need to bring new low carbon energy sources online, and handle much higher demand for electricity as we progressively electrify transport and heating."